S.Korea's POSCO launches Malaysian steel unit

SEOUL, Nov 12 (Reuters) - South Korea's POSCO (005490.KS) said on Wednesday it had launched POSCO-Malaysia, its first overseas acquisition of a steel firm, as the world's No. 4 steel mill expands in Southeast Asia.

POSCO, which spent $16 million last year to buy a 60 percent of MEGS, an electrolytic galvanised steel maker in Klang, near Kuala Lumpur, said it had changed the name of the unit to POSCO-Malaysia and raised its production capacity by 50 percent to 180,000 tonnes a year.

The unit will produce steel sheets used in home appliances such as televisions and DVD players in Malaysia, which depends heavily on imports to meet annual demand of about 250,000 tonnes of galvanised steel.

POSCO, which earns about 70 percent of its revenues at home, has begun aggressively expanding overseas in recent years, but its efforts have mainly focused on greenfield investments including a $12 billion project in India and a $5 billion deal in Vietnam.

POSCO is also building a cold-rolled steel plant in Vietnam, aiming to launch production in September 2009. (Reporting by Miyoung Kim; Editing by Ken Wills)